Apple's iTunes Radio Leaves a Mark

The success of Apple's iTunes Radio should have broadened the market's appetite for streaming platforms, but it may be having the opposite effect. Streaming service Rdio is confirming to TechCrunch that it is laying off some of its staff. The actual number of employees being let go isn't being confirmed, but TechCrunch is reporting that it could be as much as a third of the once-promising company started by Skype co-founder Janus Friis.

This isn't the end for Rdio, but you don't see too many companies thrive after they start handing out pink slips.

It can't be a mere coincidence that Apple has exploded on the scene since introducing iTunes Radio two months ago. Apple went on to reveal that 11 million users checked out the free ad-supported music streaming service during its first week of availability. Within its first month, it had served up more than 1 billion tunes to 20 million unique users.

Divide the number of tracks by the number of listeners and the simple math indicates that the average user streamed more than 50 tracks. In other words, we're not just talking about tire kickers here.

At the time of its launch, the hope for fans of rival streaming platforms was that Apple would be the market educator. It would introduce first-time listeners to the joys of streaming, and then they would flock to the free ad-supported alternatives including Pandora or the services that are consumed largely by paying subscribers, including Spotify, Rdio, and Sirius XM Radio .

We saw the first potential sign of Apple hurting its peers instead of helping when Pandora reported a sequential dip in unique listeners during the month of October. However, as a rival free service, that was probably expected. Rdio is a premium service with 90% of its users paying $9.99 a month for Web and mobile access. Is iTunes Radio so good that it's plucking away at paying subscribers elsewhere?

Sirius XM warned in its latest quarter that it would likely post a decline in net subscribers during the current quarter, and that's something that hasn't happened in three years. However, it still sees a healthy advance in paying subscibers. This dynamic isn't likely related to Apple's long-overdue arrival in streaming, but it's becoming clear that Apple's entry into the booming streaming market isn't the gift that its peers were hoping it would be.

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